Microsoft Xbox – Will It Be Your New Replacement Cable Box?

Reuters is reporting that Microsoft has been in talks with unknown media companies in an effort to obtain TV licensing for programming via the Xbox and other devices. Rumor is that Microsoft is planning a pay per view subscription service over the Internet. It would appear that Microsoft wants to go in head to head competition with Apple, Google and Netflix.

According to Reuters they state:

The maker of the Windows operating system has proposed a range of possibilities in these early talks including creating a “virtual cable operator” delivered over the Internet for which users pay a monthly fee.

Other options include using the Xbox to authenticate existing cable subscribers to watch shows with enhanced interactivity similar to how pay TV operators have sought to do over the Web, said these people.

Microsoft is also exploring the possibility of creating content silos and selling more individual channels directly such as a HBO or Showtime. It already has Walt Disney Co’s (DIS.N) ESPN on the XBox Live online service for example.

These people said a service may not arrive for another 12 months, but early discussions have been productive.

As I seat here at my computer, streaming video from Netflix, via my Roku, I can already imagine that this could be a strong possibility for Microsoft. If I were the Cable and Satellite companies, I would get prepared for a battle.

But there is good news for us consumers. We will ultimately benefit from lower prices.

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